Disposed

K.a.Johnson, v. the Kerala State Nirmithi Kendra

Kerala HC5 Mar 2021WP(C)/15251/2020

Case brief

AI extract

What is this about?

The High Court disposed of a writ petition filed by a construction contractor seeking release of retained money and permission to foreclose a contract. The court recorded a tentative agreement between parties to modify payment terms and directed payment within three weeks.

What did the court decide?

Directing release of payable amount within three weeks and permitting parties to proceed with the contract under the agreed modified terms.

K.a.Johnson, Vs the Kerala State Nirmithi… — Contract and Commercial Disputes | Kerala HC (2021)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR.JUSTICE N.NAGARESH

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FRIDAY, THE 05TH DAY OF MARCH 2021 / 14TH PHALGUNA, 1942

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WP(C).No.15251 OF 2020(F)

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PETITIONER:

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K.A.JOHNSON, AGED 55 YEARS, S/O. KUNJAVARA, KOLENCHERRY HOUSE, NEELEESWARAM P.O., KALADY(VIA), ERNAKULAM DISTRICT-683 584

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BY ADVS. SRI.S.SHANAVAS KHAN SMT.S.INDU

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RESPONDENTS:

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1 THE KERALA STATE NIRMITHI KENDRA, PTP NAGAR, THIRUVANANTHAPURAM-695 038, REPRESENTED BY ITS DIRECTOR

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2 THE REGIONAL ENGINEER, KERALA STATE NIRMITHI KENDRA, REGIONAL CENTRE, CHENAKALA ROAD, HMT COLONY P.O., KALAMASSERY, ERNAKULAM-683 503

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3 THE UNIVERSITY ENGINEER, SREE SANKARA UNIVERSITY OF SANSKRIT, KALADY, ANGAMALY, ERNAKULAM-683 574

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ADDL. 4 THE SREE SANKARA UNIVERSITY OF SANSKRIT (SSUS), KALADY, ANGAMALY, ERNAKULAM - 683514. REPRESENTED BY ITS VICE CHANCELLOR.

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ADDL.R4 IS IMPLEADED AS PER ORDER DATED 30.07.2020 IN IA NO.1/2020. R1-2 BY ADV. SRI.G.RANJU MOHAN R3-4 BY SHRI.PRASANTH S., SC, SREE SANKARACHARYA UNIVERSITY OF SANSKRIT

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 05.03.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C) No.15251/2020

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J U D G M E N T

~ ~ ~ ~ ~ ~ ~ ~ ~

Dated this the 5^th day of March, 2021

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The petitioner, a building contractor, was awarded construction work of an auditorium in the main campus of the additional 4^th respondent-University. The value of contract was ₹2,67,87,040/- and the work had to be completed within 9 months.

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The petitioner would state that he has completed almost 90% of the work by December, 2019. He could not complete the remaining work due to the wrong decision making of the respondents on piling and change of design of auditorium to air condition and sound proofing. As the delay in completion of the work is not attributable to the petitioner, no fine was imposed on the petitioner.

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Though the work was of the additional 4^th respondent-University, it was executed through the 1^st

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WP(C) No.15251/2020

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respondent-Kerala State Nirmithi Kendra. Respondents 1 and 2 withheld 25% of retention money and GST amount. Due to the failure of the respondents to facilitate execution of remaining work, the petitioner is not in a position to proceed further. In the circumstances, the petitioner prayed that retention money, security deposit and bank guarantee be released to him forthwith and he may be permitted to foreclose the contract.

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Respondents 1 and 2 filed a statement. Respondents 1 and 2 stated that they are only consultants of the additional 4^th respondent-University. As per Clause 2.5 of Ext.R2(a) Memorandum of Understanding, 25% of the estimate amount will be released by the additional 4^th respondent only after the submission of the final bill on completion of the works in all respects.

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Respondents 1 and 2 admitted that the petitioner has completed about 70% of the works which was entrusted to him. Further bills will be released only on completion of the work.

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WP(C) No.15251/2020

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Respondents 3 and 4 filed counter affidavit.

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Respondents 3 and 4 stated that the University has already paid advance of ₹3 Crores to the 1^st respondent. The balance need to be paid only on completion of the work. ₹2.62 Crores have been paid to the petitioner and a balance of nearly ₹91,27,866/- is being retained by the 1^st respondent. The University has not made restrictions on any payment to the petitioner.

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From the pleadings in the writ petition and submissions made at the Bar, it is evident that the petitioner has completed substantial portion of the work entrusted to him. Huge amounts are retained by respondents 1 and 2 as retention money, which is to be paid only after completion of the work. It may be true that 25% of the contract amount is to be paid only after the work is executed in full. But, it is to be noted that the petitioner is ready and willing to complete the work. But, he cannot move further without the cooperation of the respondents. In such circumstances, amounts otherwise due to the petitioner should not be withheld by the

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WP(C) No.15251/2020

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respondents, contended the learned counsel for the petitioner.

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During the pendency of this writ petition, a meeting was convened at the Chamber of the Registrar of the additional 4^th respondent-University on 04.12.2020. The petitioner and the representative of the 1^st respondent participated in the meeting. Taking into consideration the larger public interest, the parties have come to a tentative agreement. The minutes of the meeting produced by the University as Annexure-R4(b) reads as follows:-

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“In this situation, Kerala State Nirmithi Kendra stated that if the University modify the above clause regarding payment of the balance 25% amount ie. One Crore, as per the present GO(P) No.311/14/Fin dated 30.07.2014 (which allows payment in 7 stages such as 20% of the estimate amount as first instalment, then next five instalments as 15% each based on actual value of work done and balance 5% of the executed value will be released after successful completion of the observation period), then they can also make modifications in corresponding terms and conditions of their agreement with the contractor.”

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The learned counsel for the 1^st respondent submitted that they are willing to pay the bill amounts due to the petitioner in accordance with the said decision and

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continue to proceed with the contract in terms of GO(P) No.311/14/Fin dated 30.07.2014. The said proposal is acceptable to the petitioner also.

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In the circumstances, recording the above agreement, the writ petition is disposed of. The amount payable to the petitioner for the work he has carried out shall be paid by the 1^st respondent within a period of three weeks as per the terms agreed to by the parties. The parties may proceed with the contract in accordance with the agreement arrived at as per Annexure-R4(b). The parties will be at liberty to enter into additional agreements, if so advised.

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Sd/-

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N. NAGARESH, JUDGE

aks/05.03.2021

WP(C) No.15251/2020

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APPENDIX

PETITIONER'S EXHIBITS:

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EXHIBIT P1	TRUE C 2/77/1 BY THE	OPY O 8 RN 2ND	F THE KE DAT RESPON	COMMUNICATION NO.TECH ED 20.08.2018 ISSUED DENT
EXHIBIT P2	TRUE C 31.08. BEFORE	OPY O 2018 2ND	F THE SUBMI RESPON	COVERING LETTER DATED TTED BY PETITIONER DENT
EXHIBIT P3	TRUE 01.09.	COPY 2018	OF	THE AGREEMENT DATED
EXHIBIT P4	TRUE 03.12. 2ND RE	COPY 2018 SPOND	OF ISSUED ENT	THE LETTER DATED BY PETITIONER TO THE
EXHIBIT P5	TRUE 03.12. RESPON PAYMEN	COPY 2018 DENT T	OF ISSUED REQUE	THE LETTER DATED BY PETITIONER TO 2ND STING FOR TIME AND
EXHIBIT P6	TRUE 06.12. VICE UNIVER	COPY 2019 CHAN SITY	OF SENT CELLOR OF SAN	THE LETTER DATED BY PETITIONER TO THE OF SREE SANKARA SKRIT, KALADY
EXHIBIT P7	TRUE 18.12. RESPON	COPY 2019 DENT	OF ADDR BY THE	THE LETTER DATED ESSED TO THE 2ND PETITIONER
EXHIBIT P8	TRUE 31.01. RESPON	COPY 2020 DENT	OF ADDR	THE LETTER DATED ESSED TO THE 2ND
EXHIBIT P9	TRUE C NJALIA ANGAMA	OPY O TH QU LY	F THE ALITY	TAX INVOICE ISSUED BY TILES AND SANITARIES,
EXHIBIT P10	TRUE	COPY	OF	THE LETTER DATED
	02.07. RESPON	2020 DENT	ISS	UED TO THE 2ND

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WP(C) No.15251/2020

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RESPONDENTS' EXHIBITS:

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EXHIBIT R2(a)	TRUE COPY OF THE MOU DATED 22-02-2018
EXHIBIT R2(b)	TRUE COPY OF THE LETTER
	NO.NG/851/SSUS/2015 DATED 14.08.2018
EXHIBIT R2(c)	TRUE COPY OF THE SELECTION NOTICE DATED 20.08.2018
EXHIBIT R2(d)	TRUE COPY OF THE MINUTES OF THE MEETING DATED 03.07.2019
EXHIBIT R2(e)	TRUE COPY OF THE ROUGH COST ESTIMATE
	SUBMITTED BY THE 2ND RESPONDENT ALONG WITH A COVERING LETTER DATED 06.11.2019
EXHIBIT R2(f)	TRUE COPY OF THE LETTER DATED
	11.11.2019 ISSUED BY THE 3RD RESPONDENT
EXHIBIT R2(g)	TRUE COPY OF THE LETTER DATED 31.01.2020 SENT BY THE 2ND RESPONDENT TO THE 3RD RESPONDENT
EXHIBIT R2(h)	TRUE COPY OF THE REMINDER LETTER DATED 13.03.2020 SENT BY THE 2ND RESPONDENT
EXHIBIT R2(i)	TRUE COPY OF THE FINAL ESTIMATE ALONG WITH THE COVERING LETTER DATED 15.05.2020
EXHIBIT R2(j)	TRUE COPY OF THE REQUEST LETTER DATED 19.5.2020 ISSUED BY THE 2ND RESPONDENT TO THE 3RD RESPONDENT
EXHIBIT R2(k)	TRUE COPY OF THE LETTER ISSUED BY THE 3RD RESPONDENT REJECTING THE EXT.R2(J)
	REQUEST LETTER SENT BY THE 2ND RESPONDENT.
ANNEXURE R2(l)	TRUE COPY OF THE STATEMENT SHOWING THE AMOUNTS RELEASED TO THE PETITIONER
ANNEXURE R2(m)	TRUE COPY OF THE ESTIMATE FOR THE CONSTRUCTION OF THE AUDITORIUM
EXHIBIT R2(n)	TRUE COPY OF THE MOU DATED 12-02-2021 EXECUTED BETWEEN THE 2ND RESPONDENT AND THE ADDITIONAL 4TH RESPONDENT
EXHIBIT R4(a)	TRUE COPY OF THE MEMORANDUM OF UNDERSTANDING DATED 22-02-2018 BETWEEN THE UNIVERSITY AND THE 1ST RESPONDENT
EXHIBIT R4(b)	TRUE COPY OF THE ESTIMATE OF
	ADDITIONAL WORKS RECEIVED FROM THE 1ST RESPONDENT

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EXHIBIT R4(c) TRUE COPY OF AUDIT ENQUIRY NO.23 DATED 01-11-2019 ISSUED BY THE ASST. AUDIT OFFICER, O/o ACCOUNTANT GENERAL (GSSA) KERALA ANNEXURE R4(b) TRUE COPY OF THE MINUTES OF THE MEETING HELD ON 04-12-2020 IN THE CHAMBER OF THE REGISTRAR, SREE SANKARACHARY UNIVERSITY OF SANSKRIT SR

K.a.Johnson, v. the Kerala State Nirmithi Kendra

Case brief

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K.a.Johnson, v. the Kerala State Nirmithi Kendra

Case brief

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